President Joe Biden talking about student debt relief

U.S. President Joe speaking in the White House August 24, 2022 in Washington, DC. (Photo: Alex Wong/Getty Images)

President Biden Must Pass a Windfall Tax

The President's best course of action is to keep the pressure up on Big Oil by going all in on a windfall profits tax.

President Biden has the opportunity to show the public he stands with them instead of Big Oil. He's set up a clear choice for the fossil fuel executives gouging American families at the pump: lower prices or face the consequences.

In a blistering speech on Monday, President Biden told oil and gas companies that if they don't bring down costs for working families, his administration will work with Congress to consider "requiring oil companies to pay tax penalties and face other restrictions." According to reports, the policy the White House is considering is a Big Oil Windfall Profits Tax, which could tax the industry's windfall profits and use the revenue to send relief directly to the American public.

A windfall profits tax is exactly the right approach, as Big Oil continues to gouge Americans at the pump and on our home energy bills. As third quarter earnings reports are announced, Big Oil companies are breaking records with their latest haul--reportedly raking in over $50 billion dollars in just the last 90 days. That brings their total to just over $303 billion, and the year isn't even over yet. Instead of lowering prices or investing in clean energy solutions, Big Oil is using their massive profits for $155 billion of record stock buybacks and dividends designed to enrich their CEOs and wealthiest shareholders.

A Big Oil Windfall Profits Tax--initially proposed last March by Senator Sheldon Whitehouse and Representative Ro Khanna--would tax these obscene profits and use the revenue to provide direct relief to working people. Experts estimate that, given the sheer size of profits from these companies, a windfall profits tax would likely raise tens of billions of dollars -enough to send families hundreds of dollars in relief ahead of this winter.

Not only has a windfall profits tax caught President Biden's eye, it's also garnered widespread popularity across the country, and around the world. Polling in July showed three in five Americans agree that big oil and gas company CEOs are using the pandemic and war in Ukraine as an excuse to raise prices, with a staggering 80 percent of voters supporting a windfall profits tax earlier this year. In Congress, 82 Members have endorsed some version of windfall profits tax legislation, with support growing by the day. And the U.S isn't the only country talking about it: a windfall profits tax has already been passed by several European countries, including the United Kingdom, where the policy was implemented by the Conservative government as a way to combat high energy prices.

In his speech on Monday, the President said that he'd pursue a windfall tax if Big Oil didn't start increasing production and investing in America. There's no need to wait. Oil and gas CEOs have been ignoring the need to help the public by lowering prices all year, all while lining their own pockets and giving millions of dollars to Republican politicians who fight any pressure on the fossil fuel industry . Meanwhile, the U.S is already producing near record amounts of oil and gas, but prices at the pump remain high because Big Oil is profiteering from global disruptions caused by the war in Ukraine. Besides, increasing production will only increase climate- wrecking pollution, while doing little to lower prices. As we transition to clean and affordable energy for all, a windfall profits tax can provide immediate relief to people who are struggling right now to pay for expensive fossil fuels.

The President's best course of action is to keep the pressure up on Big Oil by going all in on a windfall profits tax. It is a popular way to hold Big Oil CEOs accountable while getting relief directly to the American public now. As President Biden said, "The American people are going to judge who's standing with them, and who is only looking out for their bottom line." Despite Big Oil's effort to defend their profits and hide behind their allies in Congress, Americans know that Big Oil is to blame for their pain at the pump. It's time President Biden and Congress truly stand with the American people and pass a windfall profits tax as soon as possible.

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